ASX-SGX bid may open Nasdaq door

There could be more to Singapore Exchange chief executive Magnus Böcker’s $8.4 billion takeover bid for
ASX
Ltd than meets the eye.

Industry sources in Asia think the acquisition is part of a broader strategy to create a business large enough to bid for one of the world’s largest exchange operators, Nasdaq OMX, of which Böcker was previously the president following the merger of the two Scandinavian and US exchanges in February 2008.

There are whispers he could be interested in making a play for the company following a successful SGX and ASX merger (for which regulatory processes will be on hold until January). The theory could explain why Böcker is happy to hand over such a handsome premium to acquire ASX.

But others think the time needed to bed down the current deal means any further M&A plans would be unlikely in the medium term.

SGX’s market capitalisation is about one-third larger than ASX’s, but the Australian stockmarket is more than twice Singapore’s. Nasdaq OMX is worth about $US4.8 billion.

SGX’s bid for ASX is expected to face fierce opposition in Parliament, which must decide whether to lift a 15 per cent ownership cap on ASX shares.